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Help for Companies and Businesses Affected by Coronavirus (COVID-19) and Lockdown

Written by Robert Moore Marketing Manager Written by Keith Steven Managing Director 7 April 2020

help for business

Coronavirus (COVID-19) has meant that the Government banks and other organisations are having to act quickly to offer help and support to companies and businesses affected.  The government shut down of whole sectors of the economy is having a profound impact.

This page is updated on news from the Banks, the Government, Suppliers, Local Authorities and the Law. There is a lot of information contained but all for your convenience and benefit, so take time and care to read all.  Please do not call us asking about the grants available as all we know is on this page.  Thank you







Download our worried directors guide to understand your options

Please note that the guide was written pre COVID-19 and there are some likely changes to insolvency rules regarding wrongful trading.  Please see more information on the new rules here.

 


So what has been done?

The UK Government

  • Businesses are able to apply for a Coronavirus business interruption loan. The next quarter of VAT payments will be deferred, meaning businesses will not need to make VAT payments until the end of June 2020. Businesses will have until the end of the 2020-21 tax year to settle any liabilities that have accumulated during the deferral period.Revised measures have been made to this scheme to ensure small businesses get the loans they need. The need for personal guarantees for loans up to £250,000 has been removed. Additional help has also been added for larger businesses, with revenues between £45m and £500m. They have access to a £25m loan facility. Interest rates however have been left to the banks discretion.
  • There is a package for the self-employed.  They will pay 80% of profits averaged out over 1-3 years up to a maximum of £2500.  Tax authorities will get in touch with them directly about the grants. If you haven't filed a tax return you have 4 weeks to do so.  Due to the complexity payments are likely to be in June as a lump sum.  Self employed will be able to claim universal credit.  If your business has profits of over £50k you will not be able to claim.  (Please be clear that dividends taken out of a company are not included as these are taken out at a low tax rate so these payments do not qualify you for additional help.  If you have taken out dividends when there was no profit (distributable reserves) then you actually owe the government taxes.  Please take this up with your accountant.)
  • The insolvency rules are likely to be changed.  Please see this page for details
  • Under the new Coronavirus Job Retention scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis. The scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March 2020. It will continue for at least three months, and can include workers who were in employment on 28 February.  Details of how to claim can be found here
  • Employees, who have not taken all of their statutory annual leave due to COVID-19,are able to carry over up to four weeks into the next two leave years.
  • Employees are able to take emergency volunteer leave to help support essential health and social care workers.
  • Income Tax payments due 31 July 2020 under the Self-Assessment system will be deferred to 31 January 2021, automatically without any applications needed. There will be no penalties or interest for late payment in this period.
  • £330bn for all companies to access state-backed loans paying rent, salaries, purchase stock or suppliers - allowing companies to meet fixed cost needs
  • For those in financial difficulty due to the virus, mortgage lenders will offer a three-month mortgage holiday
  • Tens of thousands of England’s retail, leisure and hospitality firms will be exempt from paying any business rates in the coming year (eligible for the ‘tax holiday’)
  • Businesses with less than 250 employees can reclaim the cost of having to pay Statutory Sick Pay whilst eligible employees take the 14 isolation days off, due to the coronavirus. Those who are not eligible to sick pay (the self employed) are able to claim Employment and Support Allowance from the first day of illness rather than having to wait until day eight.
  • Cash grants of upto £30,000 have been allowed for small businesses depending on rateable values (The grant for companies with a rateable value of less than £15,000 has been increased to £10k).  You will need to claim this through the local authority. Here is some more information on rates.  Be aware though that if you pay your rent with rates included then you will not receive any help.  You have to be billed directly by the rating authority.  Also, if you do not have a business premises ( ie you work from home) you are not eligible for a cash grant.
  • HMRC’s Time to Pay service has been expanded. This includes a new helpline 0800 0159 559 so that businesses and those who are self-employed can arrange to defer tax payments. Breathing space is therefore given to SMEs around paying taxes
  • A tax break on national insurance contributions. 500,000 people will no longer have to pay this tax. Those who still have to pay will save around £85 a year

You can read the latest advice and guidance from government for businesses on its coronavirus pages, and ultimatley by keeping up to date with the news (information for other areas such as Wales and Ireland can also be seen on key news outlets). HMRC have a new dedicated phone number for the coronavirus helpline targeted at businesses and the self-employed: 0800 024 1222.


The Bank Of England

  • an emergency cut in interest rates from 0.75 per cent to 0.1 per cent, taking levels back down to the lowest level in history.
  • announced its plans to free up billions of pounds of extra lending power to help banks support firms amid the coronavirus outbreak.

Commercial Banks

  • allowing business customers to not have to pay back the capital on their loans for a period of 3 months, meaning they will only be paying the interest on their loans.  The same has been indicated for mortgage customers.
  • £5 billion in funds for small and medium sized UK businesses has also been announced by NatWest. This has been backed by the government.
  • extended overdraft facilities.
  • Barclays and Natwest have announced 26th March that they will NOT be requiring a personal guarantee on Business loans of less than £250k. 
  • Commercial banks are NOT paying dividends to shareholders to preserve cash.

Businesses

  • Morrisons has announced that suppliers with between £100k and £1m turnover will be paid immediately on presentation of their invoice.  Over £1m turnover the term will remain 60 days.  Companies with less than £100k will need to wait 14 days.
  • Facebook has announced that it is releasing $100m cash grants to companies that use its apps around the world.
  • Many businesses have closed and halted trading due to the virus, including all restaurants, gyms, cafes, retailers - even McDonalds and ITV/BBC filming.
  • Martin Lewis releases £1m to charities.

Devolved Regions of Scotland, Wales and Northern Ireland

  • The Scottish Government has launched a website and helpline for small businesses struggling to cope. They have also announced a £320m support package for affected businesses.** The link to claim a Coronavirus Business Support Grant in Scotland is now LIVE.

** If you are registered for non-domestic rates (i.e. you have business premises, an office, warehouse or shop) you may be able to claim a cash grant of £10,000 or £25,000. This depends on what business sector you are in, and the rateable value of your premises.

IMPORTANT: You need to complete a claim form to apply for the grant, Edinburgh City Council link is : https://lnkd.in/dgR-Ggy For all other Scottish local authorities, go to the link below, find the 'Applying for a Grant and getting paid section' and enter your local authority from the drop down https://lnkd.in/dZFcvtv

  • Specific guidance for businesses in Northern Ireland

Businesses in Northern Ireland can access a variety of specific and UK-wide coronavirus support schemes and measures. The Northern Ireland Executive aannounced a £367m package of grants to provide funding to around 30,000 businesses in Northern Ireland. Information is available via Invest NI. Businesses with a rateable value of up to £15,000 can access a COVID Small Business Grant of £10,000. More information on what is being done to help NI businesses can be found here.

  • Coronavirus support for seafood fishing industry – (Scotland only)


The Scottish seafood sector is to receive a package of more than £5 million in financial support during the COVID-19 outbreak.

An initial payment of 50% of two months’ average earnings will be made to owners of all full time Scottish registered fishing vessels of 12 metres length and under. Support is also being developed for the onshore processing industry and others in the shellfish growing sector.

Marine Scotland will be writing to all vessels and relevant representative Associations with more
details. If you have any immediate queries you can email seafisheriesintervention@gov.scot

Further clarification of the scheme is as follows:

  • full time is defined as where a vessel has recorded landings of £20,000 or more. This is the same limit that has been applied in previous schemesvessels that are under 12 metres in length and were registered in Scotland on the 18 March 2020
  • earnings are defined as recorded landing income from sales notes from 2019. This data is submitted to Marine Scotland by buyers
  • monthly payments are based on monthly average 2019 sales income
  • wrasse catching vessels will not be included in this initial scheme.

Regulations, Employment and Insolvency Law

Companies are legally entitled to cancel holidays due to staffing shortages. However, they must give notice equivalent to the length of holiday.  If an employee cancels their holiday, the company does not have an obligation to allow them back into work if they have made alternative arrangements.  Be aware that you can lay off staff without resorting to redundancies. For more information on this see the Government site.

Being an employer you may be worried about your rights and duties, what they are: The Federation of Small Businesses has a useful page with advice on this here

The government is looking at passing legislation to ensure that companies do not become insolvent due to the outbreak. Winding up petitions may be stopped and the rules relaxed on wrongful trading are under discussion.  For more information see this page https://news.sky.com/story/coronavirus-ministers-race-to-reform-insolvency-laws-11963361


Filing of Accounts

Companies House has said that companies have an extra 3 months to file their accounts due to Coronavirus.


Rent

It has been indicated that there is going to be a moratorium on any action for forfieture of leases.  Many retailers including Primark have said they are not going to pay their rent this quarter.


Will our business get its money back spent on services that are not now deliverable?

This is a difficult question and you should probably contact a lawyer who can look at any contract.  If you have spent money using a credit card then you can usually get a refund. 


How can businesses mitigate their problems?

In all honesty, the best advice for businesses is to follow the same advice given to the general public...keep an eye on what is happening in your local area/country. Follow the measures suggested i.e. washing hands frequently, stockpiling essential goods, avoiding close contact with others, working from home if possible, cancel/postpone any unnecessary business travel.

A little tip too...be careful of your brand!  -  If you need to make people redundant then make sure you do it in respectful and sympathetic tone.  Social media is shaming companies with pictures of letters and emails etc that do not look good...do not be a part of that!


How can we help?

We have numerous guides of options you can look into to help...download our CVA experts guide here or view our pre pack page.  If you feel you must close down permanently then see our page here on liquidation. If you are in the hospitality industry we do have a rescue guide, not specific to the current situation but still relevant.

Meanwhile, if you have any serious concerns about cashflow then you can make use of some of our tools for free. Prepare a cashflow forecast using our template here, regularly updating it as this will help wish cash planning. Remember to be realistic. The more realistic you are the better you will see a true reflection of your future cash situation, any deficiencies to be able to address any issues in advance. 

Company Rescue have been providing services to distressed company directors for over 20 years and we will continue to try and help businesses of all shapes and sizes through what could be, a very turbulent, few months.

If you have serious concerns about the ability of your company to pay it’s bills and survive beyond the current situation please do give us a call, FREE on 0800 9700539.

Amid this crisis, we are all working from home so can answer your enquiries as normal. We also have a 24 hour online chat service on this website, manned by real people, not robots. If our chat team are unable to answer your questions straight away, then within a few hours one of our experienced team members will call you, listen to your concerns and offer some advice and suggest steps you can take.

Categories: What is administration

How can we help?

We have numerous guides of options you can look into to help...download our CVA experts guide here or view our pre pack page.  If you feel you must close down permanently then see our guide here on liquidation. If you are in the hospitality industry we do have a rescue guide, not specific to the current situation but still relevant.

We also have a full 80 page worried directors guide which you can now download for free. 

Please note that the guide was written pre Covid-19 and there are some likely changes to insolvency rules regarding wrongful trading.  Please see this page here.​​​​​​​

Meanwhile, if you have any serious concerns about cashflow then you can make use of some of our tools for free. Prepare a cashflow forecast using our template here, regularly updating it as this will help wish cash planning.

A Worried Director

The Ultimate Guide For Worried Directors

Worried about poor cashflow? How to win new work? How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539

Please note that the guide was written pre Covid-19 and there are some likely changes to insolvency rules regarding wrongful trading.  Please see this page here.​​​​​​​

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